Bitcoin is Trading at Extreme Premium in Stock Market

The demand toward Bitcoin is also increasing at a rapid rate in the public stock markets. Some ETFs and instruments including Bitcoin Investment Trust are being traded with extreme premium rates.

Barry Silbert-led Digital Currency Group’s subsidiary company Grayscale Investments operates one of the most frequently traded and popular publicly quoted securities based on Bitcoin price.

Each share of Bitcoin Investment Trust (GBTC) represents 10 percent of Bitcoin price and at the time of writing, GBTC is being traded at $417.

The public stock market

In the US stock market, accredited traders and institutional investors are buying into Bitcoin with instruments such as GBTC.

Although many investors have moved onto regulated trading platforms, such as Kraken, Coinbase’s GDAX and the Winklevoss twins’ Gemini, a large portion of accredited investors still rely on publicly quoted Bitcoin securities such as GBTC to invest in the digital currency.

Currently, the share price of GBTC demonstrates a staggering 48.92 percent premium rate for investors in the public stock market. The global average Bitcoin price, calculated by averaging the price of each Bitcoin exchange market, including the US, South Korea, Japan and China at the time of writing is $2,767.

In the public stock market, through instruments such as GBTC, Bitcoin is being traded at well over $4,000.

Why the demand is increasing

The increase in the demand towards Bitcoin in public stock markets such as the US and Sweden can be attributed to a number of factors.

The three most obvious driving factors of Bitcoin demand in public stock markets are the ability of Bitcoin to scale, increased regulation of Bitcoin by overseas markets and increased demand towards Bitcoin from institutional investors such as Fidelity.

In most regions, large-scale investments or adoption by leading financial institutions and conglomerates lead to rapid adoption by the public. When the Japanese government first legalized Bitcoin and large companies such as the country’s largest retailer Bic Camera integrated Bitcoin as a payment method, trading volume of the Japanese Bitcoin exchange market surged.

In the US, some of the largest financial institutions and investment firms including Fidelity Investments, which manages over $2.13 tln worth of assets, have revealed that they have been investing in Bitcoin for a long period of time, even testing some of its unique applications.

"I love this stuff – Bitcoin, Ethereum, Blockchain technology – and what the future holds. I am still a believer – and it's no accident that I'm one of the few standing before you today from a large financial services firm that hasn't given up on digital currencies."

More to that, the country’s leading financial institutions including Goldman Sachs and Bank of America have also started to provide extensive coverage on Bitcoin. With Goldman Sachs providing a highly optimistic outlook on Bitcoin price and Bank of America highlighting some measures that can demonstrate Bitcoin’s exponential growth.

All of the abovementioned factors have led to an increase in the confidence of accredited and institutional investors that are investing into Bitcoin through regulated channels such as Grayscale Investment’s GBTC.